Fair Work rules in favour of SME that sacked employee for spending company time working on his own competing business

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The Fair Work Commission has ruled in favour of a small skylight manufacturer that dismissed an employee for working on his own business while on company time.  

Solarbright Country fired Matthew Jones in November last year after the business discovered he had used the company’s time and resources to work on his own private business.  

Jones was told he had been fired on the morning he was due to return from annual leave.  

An email had been sent to him from the company’s director, saying his employment was to be terminated immediately because of serious misconduct.  

Jones disputed the allegations made against him, however, and took the matter to the Fair Work Commission where he argued his dismissal was unfair and he should be entitled to compensation.  

Solarbright Country’s managing director, Paul Yako, told the commission he inspected Jones’s office while he was on annual leave and found marketing material for his business, MCG Roofing.  

Yako also told the commission Jones’s calendar was 40% booked with tasks for his roofing business.  

“I was taken as an idiot,” Yako told the commission.  

The commission ruled in favour of Solarbright Country and dismissed Jones’ unfair dismissal application.  

In his ruling, Commissioner Geoff Bull said the employment relationship between the two men was “doomed to fail”.   

“I find that Mr Yako had reasonable grounds for holding the view that Mr Jones’s conduct was sufficiently serious to justify immediate dismissal,” Bull said. 

“On this basis, the termination was consistent with the Small Business Fair Dismissal Code; the application for an unfair dismissal remedy is dismissed.”  

Employment lawyer Peter Vitale told SmartCompany all employees have a basic duty not to have personal interests that conflict with the interests of their employer.  

“In this case, the fact that the employee was using time for which his employer paid him to work on his own business amounted to a clear conflict of interest and a breach of the duty of good faith,” Vitale says.   

“The fact that the employee’s business was in competition with the employer amounts to a conflict of interest, even if he had been conducting it wholly in his own time.  

“These breaches amount to serious misconduct for which the employer is entitled to terminate employment summarily.”  

SmartCompany contacted Solarbright Country and Matthew Jones but did not receive a response prior to publication.

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Eloise Keating is the editor of SmartCompany. Previously, Eloise was news editor at Books+Publishing, the trade press for the Australian book industry.

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